Mar 03, 2011

Why Can't We Be Friends? New Evidence of Coziness between an Interior Department Regulator and a Wyoming Business Tycoon

By Mandy Smithberger

Earlier this week POGO sent a letter to Interior Secretary Ken Salazar and Bureau of Land Management (BLM) Director Bob Abbey raising concerns that regulators may have been too close to the industry they are charged with overseeing. POGO’s concerns relate to two previously unavailable reports by the Department of the Interior Inspector General (DOI IG). One report found that James Murkin, a manager at BLM’s Casper, Wyoming Field Office, failed to disclose regular meetings with industry officials, two dinners with a prohibited source, and the fact that he received $916.55 worth of patio materials without having to prepay (as was the usual business practice)—all while determining whether to approve a land exchange to benefit the prohibited source.

The name of the prohibited source is redacted, but sources familiar with the investigation have confirmed that the prohibited source wining and dining Mr. Murkin was Neil McMurry, co-founder of the McMurry oil company and McMurry Ready-Mix (the providers of the patio material), and that the proposed deal involved exchanging 2,072.95 acres of BLM land for 30.1 acres owned by McMurry’s Eagle Creek Ranch. In addition to being a significant player in Wyoming politics and owner of one of the restaurants where the undisclosed meals occurred, the timeline below indicates Mr. McMurry was a personal friend of Mr. Murkin—beginning approximately when Mr. Murkin became the head of the Casper, Wyoming field office.

The IG's report details how Mr. Murkin was unusually active in the proposed land exchange. Murkin, for example, facilitated a meeting with McMurry (a “prohibited source”) and the Office of Solicitor after the Solicitor determined that cultural artifacts found on two large archeological tracts could prevent the tracts from being included in the exchange. The IG reported that there was a perception that Mr. Murkin was trying to “pressure” the Solicitor. While the effort was ultimately unsuccessful and the land exchange was not completed, Mr. Murkin did approve the land exchange feasibility report and signed an Agreement to Initiate a Land Exchange and circumvented the usual processes of approval to do so.

As in the case of Steve Henke, a former manager at the BLM-Farmington, New Mexico, field office whom we have previously written to you about, Murkin took annual ethics training on receiving gifts from prohibited sources. The fact that in both of these cases the BLM managers took ethics training only adds to their culpability; they should have known better because they were presumably trained to know better. In contrast to the ethics counselor’s inability to provide the DOI IG special agent with a definitive answer, even Murkin seems to believe that he violated ethics rules. He admitted to the agent that McMurry “was probably a prohibited source” and that he “probably should have removed [redacted] from the decision-making process regarding the land exchange.”“I goofed,” Murkin told the agent. “Not my finest hour, I screwed this one up.”

A second IG report obtained by POGO shows that Neil McMurry trespassed—which BLM defines as “ using, occupying, or developing the public lands or their resources without a required authorization or in a way that is beyond the scope and terms and conditions of your authorization”— on federal lands on numerous occasions. Chart below:

While BLM could have pursued criminal penalties for the trespasses (which would multiply the fines owed and increase taxpayer revenue), the agency chose not to do so, in some cases against the advice and evidence provided by their own geologists. Instances of trespass are rare (the IG was told that he could only remember two citations being issued in the last 8 years, and one was for McMurry), so it may be that regulatory hurdles make enforcement of criminal penalties impracticable and that no one is fined criminally as a result. But if this does indicate preferential treatment due to a friendship with the head of the BLM office, taxpayers may be losing out on much-needed revenue.